HL Economics

Spanish Prision

Although Spain was on board a few years ago when the euro was introduced, now its weary. when Spain has its pesos, it could manipulate its currency and policies to suit its economic situation and correct imbalances. However, with the single currency, Spain has lost all of its control. Why should to Euro depreciate when other countries are not having a problem. Spain is now stuck is the euros prison. As its economy spirals downward, there really nothing Spain can do. They can’t manipulate their currency, and depreciating internally will cause pain to everyone involved. While leaving the Euro seems the best choice, the expenses and complications involved make it a bad choice as well. While the US is in a similar situation in economic terms, using its own currency has given the US the edge as far as riding out the down turn. The US still has the power to instate policies to affect the dollar, giving it the advantage over Spain.